Each week Trifecta Stocks identifies names that look bearish and may present interesting investing opportunities on the short side.
Using technical analysis of the charts of those stocks, and, when appropriate, recent actions and grades from TheStreet's Quant Ratings, we zero in on five names.
While we will not be weighing in with fundamental analysis, we hope this piece will give investors interested in stocks on the way down a good starting point to do further homework on the names.
Boston Beer Co.
The brewer behind the Samuel Adams brand has been in a severe downtrend for months and has lost 65% of its value. There is no end in sight here as the stock has fallen through many support levels.
Money flow is still weak and we can see from the green bars there is some resistance ahead. The Relative Strength Index (RSI) is weak and is at 50, a level the stock can't even rise above.
This is still a good short, believe it or not. Set a stop at $520 and look to ride this down to $400.
The stock of the maker of glass containers was drilled in the summer, and while the downtrend channel was gently gliding the stock down the recent price action is not encouraging.
Higher turnover with poor money flow has this stock set up for even a bigger leg lower. RSI is oversold here, but that's not a buy signal.
Moving Average Convergence Divergence (MACD) is on a sell signal here, too; look for a move into single digits, but put in a stop at $15.
This commentary is an excerpt from "5 Bearish Bets" a weekly feature sent to subscribers of Trifecta Stocks. Click here to learn more about this portfolio, trading ideas and market commentary product.
Want to find out the other stocks we think look good short this week and how to play them? Click here for a trial subscription to Trifecta Stocks and get "Bearish Bets" each week!
-- Bob Lang and Chris Versace are co-portfolio managers of Trifecta Stocks.